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Global Weekly Fintech Update

14 December 2020

14 December 2020

Welcome to this week's global fintech round-up, summarising fintech regulatory developments that have happened around the world along with our Clifford Chance fintech publications and upcoming events.

Details of these and previous developments can also be found on our Fintech Topic Guide on the Clifford Chance Financial Markets Toolkit.

You are welcome to share the round-up with colleagues who may like to subscribe.

CLIFFORD CHANCE PUBLICATIONS AND MATERIALS

Birth of the Digital Markets Unit: the UK's new competition regime for digital platforms with strategic market status

SPOTLIGHT:

European Crowdfunding Regulation – Cross-border options on the way

With the publication of the Crowdfunding Regulation in October 2020, the patchwork of regulatory frameworks applicable to both investment-based and lending-based crowdfunding across the EU is drawing to a close. The Regulation will bring certainty for investors and improved access for businesses in need of funding when it comes into force in November 2021.

GLOBAL LEGAL AND REGULATORY UPDATES
International
  • (10 Dec 2020) The Global Legal Entity Identifier (LEI) Foundation has announced the launch of an initiative to fully digitise the Global LEI System by creating a digitally verifiable credential containing the LEI, which would replace the current manual processes required to access and confirm an entity's LEI data | Press release
  • (7 Dec 2020) The G7 Finance Ministers and Central Bank Governors have met to discuss the challenges facing the financial sector. Among other things, the group considered ongoing responses to the evolving digital asset landscape and reiterated their support for the regulation of digital currencies. | Press release
  • (3 Dec 2020) Report on the progress of Project Helvetia, a joint initiative of the Bank for International Settlements Innovation Hub Swiss Centre, the Swiss National Bank and the SIX Swiss Exchange (SIX) to assess methods of integrating tokenised assets and central bank money. In its first two proof of concepts, Project Helvetia demonstrated the feasibility of settling tokenised assets with wholesale central bank digital currencies (CBDCs) and of linking a distributed ledger technology (DLT) platform to existing payment systems. | Press release​
  • (2 Dec 2020) Financial Action Task Force survey to seek views from banks, payment service providers, fintechs and other stakeholders on how to enhance cross-border payments. Responses are due by 15 January 2021.
  • (30 Nov 2020) International Swaps and Derivatives Association (ISDA) legal guidelines for smart derivatives contracts, focusing on foreign exchange derivatives | Press release
Americas

Canada:  

  • (16 Nov 2020) Ontario Securities Commission (OSC) consultation on its draft statement of priorities for 2021-2022. Key priorities in the area of fintech include engaging with fintech firms and supporting innovation in the capital markets and modernising the OSC technology platform. Responses are due by 16 December 2020.

US:  

  • (9 Dec 2020) Letter to the Securities and Exchange Commission (SEC) Chairman, Jay Clayton, signed by nine members of Congress requesting that the SEC and Financial Industry Regulatory Authority take steps to clarify the regulatory framework for digital asset custody services in markets they regulate.
  • (4 Dec 2020) Speech​ by Federal Reserve Governor Michelle Bowman on her predictions for the role of technological innovation in community banking and on the Federal Reserve's upcoming work in that area, including its plans to issue best practice guidance for managing community bank partnerships with fintech companies.
  • (3 Dec 2020) Annual report​ of the Treasury's Financial Stability Oversight Council, which outlines significant financial market and regulatory developments and analyses potential emerging threats. Among other things, the Council calls on federal and state regulators to continue to monitor the impact of financial innovation on market stability.
APAC

Australia:     

  • (8 Dec 2020) The Council of Financial Regulators has launched a Cyber Operational Resilience Intelligence-led Exercises (CORIE) framework to test and demonstrate the cyber maturity and resilience of institutions within the Australian financial services industry. | Press release | CORIE framework
  • (7 Dec 2020) Speech by the Governor of the Reserve Bank of Australia, Philip Lowe, on innovation and regulation in the Australian payments system, in which he discusses, among other things, the issues posed by the involvement of big tech in financial services.

China:            

  • (8 Dec 2020) The Monetary Authority of Singapore (MAS) and the People's Bank of China have signed an agreement aimed at expanding financial cooperation to aid post-COVID-19 recovery, including by strengthening cooperation in digital finance to support trade and e-commerce between the two countries | Press release | See our table of fintech cooperation agreements for more information and a full list of international agreements.
  • (8 Dec 2020) Speech​ by the China Banking and Insurance Regulatory Commission Chairman, Guo Shuqing, on China's experience in developing and supervising the fintech sector, in which he states the Commission is considering measures to address new systemic risks in the sector and is closely monitoring its 'too big to fail' companies

Hong Kong:

  • (4 Dec 2020) Statement​ from the Hong Kong Monetary Authority (HKMA) Chief Executive, Eddie Yue, on the use of fintech for cross-border payments, in which he confirms that the HKMA are in discussions with the People's Bank of China (PBOC) about a technical pilot of the PBOC's digital renminbi.

Malaysia:     

  • (1 Dec 2020) Speech​ by the Assistant Governor of the Central Bank of Malaysia, Adnan Zaylani Mohamad Zahid, on the role of e-payments and fintech in Islamic finance.

Pakistan:      

  • (2 Dec 2020) Tweet​ from Zia Ullah Bangash, the Science, Technology and Information Technology Advisor to the Chief Minister of the Khyber Pakhtunkhwa province in Pakistan, on a resolution from the province's legislative assembly calling for the legalisation of cryptocurrency and cryptomining.

The Philippines:         

  • (dated 27 Oct, published 8 Dec 2020) Speech​ by the Governor of the Central Bank of the Philippines on its roadmap charting the current and planned initiatives from 2020 to 2023 to support and advance the country's digital payments ecosystem

Singapore:   

  • (9 Dec 2020) The Monetary Authority of Singapore (MAS) and the Central Bank of Hungary have signed a fintech cooperation agreement, which facilitates the sharing of information on developments in fintech, the collaboration on joint innovation projects and the referral of fintech businesses between the two jurisdictions | Press release | See our table of fintech cooperation agreements for more information and a full list of international agreements.
  • (8 Dec 2020) MAS and the People's Bank of China have signed an agreement aimed at expanding financial cooperation to aid post-COVID-19 recovery, including by strengthening cooperation in digital finance to support trade and e-commerce between the two countries | Press release | See our table of fintech cooperation agreements for more information and a full list of international agreements.
  • (8 Dec 2020) Speech​ by MAS Managing Director, Ravi Menon, on how fintech can be leveraged to create a more inclusive society and more sustainable planet
  • (30 Nov 2020) MAS has announced that non-bank financial institutions (NFIs), licensed as major payment institutions under the Payment Services Act, will be granted direct access to the banking system's retail payments infrastructure from February 2021. This will allow users of NFI e-wallets to make real-time transfers between their e-wallet and their bank account. | Press release
Europe

EU:  

(8 Dec 2020) EU Parliament Think Tank briefing​, which explains the rationale behind the EU's recently announced plans to regulate large platforms that act as digital gatekeepers in the EU and provides an overview of the key policy questions currently under discussion

France:          

  • (9 Dec 2020) The Government has introduced an order under the PACTE Law which prohibits digital asset service providers from holding anonymous accounts in an effort to prevent digital assets from being used for illicit activities such as money laundering and terrorism financing | Press release (in French)
  • (8 Dec 2020) Speech​ by the Governor of the Bank of France, François Villeroy de Galhau, on the regulation of digital innovation, including thoughts on the EU's work on the regulation of stablecoins, the issuance of a CBDC and the mobilisation of a European private payments infrastructure.

Hungary:      

  • (9 Dec 2020) The Monetary Authority of Singapore (MAS) and the Central Bank of Hungary have signed a fintech cooperation agreement, which facilitates the sharing of information on developments in fintech, the collaboration on joint innovation projects and the referral of fintech businesses between the two jurisdictions | Press release | See our table of fintech cooperation agreements for more information and a full list of international agreements.

Italy:              

  • (7 Dec 2020) Speech​ by the Deputy Governor of the Bank of Italy, Alessandra Perrazzelli, on the work being done in the areas of digitalisation and financial services innovation under the Italian G20 Presidency agenda

 The Netherlands:      

  • (10 Dec 2020) The Authority for Consumers and Markets (ACM) has announced the launch of a trial to test how it can monitor the functioning of algorithms used by businesses. The trial, which is being run with the music-hosting website, Muziekweb, will analyse how the site's algorithms deliver personalised music recommendations. The findings of the investigation will inform the ACM's efforts to reduce the risks posed by algorithms used by businesses. Alongside the trial, the ACM has published a position paper(in Dutch) on the supervision of algorithmic applications. | Press release

Poland:

  • (10 Dec 2020) Polish Financial Supervision Authority (KNF) statement (in Polish) setting out its expectations regarding the issuance and trading of cryptoassets

Switzerland:

  • (3 Dec 2020) Report on the progress of Project Helvetia, a joint initiative of the Bank for International Settlements Innovation Hub Swiss Centre, the Swiss National Bank and the SIX Swiss Exchange (SIX) to assess methods of integrating tokenised assets and central bank money. In its first two proof of concepts, Project Helvetia demonstrated the feasibility of settling tokenised assets with wholesale CBDCs and of linking a DLT platform to existing payment systems. | Press release​

UK:

  • (9 Dec 2020) The Department for International Trade has announced the launch of a new global partnerships programme 'Leading Edge', which is designed to help international financial institutions in priority markets (starting with Singapore, Australia and the US) access British fintech solutions in areas such as regtech, robotic process automation and artificial intelligence | Press release
  • (8 Dec 2020) Competition and Markets Authority Digital Markets Unit advice to the Government on the design and implementation of its new competition regime for digital markets | Press release​
  • (8 Dec 2020) Letter from the Financial Markets Law Committee (FMLC) to HM Treasury regarding the recent Innovation Working Group survey on LEIs. In its letter, the FMLC highlights some of the key issues around the use of LEIs by firms dealing with cryptoassets.
  • (Dec 2020) Information Commissioner's Office survey on the usability and effectiveness of the guidance it produced in collaboration with the Alan Turing Institute on explaining decisions made using artificial intelligence. Responses are due by 18 December 2020.
Middle East

Oman:

  • (8 Dec 2020) The Central Bank of Oman has announced it has launched its fintech regulatory sandbox (FRS) initiative, which will permit participants to test innovative fintech solutions under the supervision of the Bank | Press release | FRS framework
CLIFFORD CHANCE EVENTS

Perspectives series – Data claims in the UK and Europe: scaling the risk (15 December 2020):
Since it came into force in 2018, GDPR has led to a significant increase in collective data claims worth billions of euros. Our specialists will provide an update on the most active jurisdictions, including the UK and the Netherlands, and an overview as to how courts in the UK and across Europe are starting to grapple with the key question, 'what is our personal data worth?' | For more information and to register, see the registration form

Additional Information

This publication does not necessarily deal with every important topic nor cover every aspect of the topics with which it deals. It is not designed to provide legal or other advice. Clifford Chance is not responsible for third party content. Please note that English language translations may not be available for some content. 

The content above relating to the People's Republic of China (PRC) is based on our experience as international counsel representing clients in business activities in the PRC and should not be construed as constituting a legal opinion on the application of PRC law. As is the case for all international law firms with offices in the PRC, whilst we are authorised to provide information concerning the effect of the Chinese legal environment, we are not permitted to engage in Chinese legal affairs. Our employees who have PRC legal professional qualification certificates are currently not PRC practising lawyers.